Global equity markets ended weaker last week, amid continuing global trade war fears. UK markets ended the week in negative territory, amid uncertainty over the US President, Donald Trump’s trade policies on China. On the macroeconomic front, UK’s GfK consumer confidence index unexpectedly dropped in June. On the contrary, the nation’s gross domestic product (GDP) advanced more than market expectations in the first quarter of 2018. The region’s net consumer credit rose less-than-anticipated in May. Moreover, the BBA loans for house purchase unexpectedly jumped to a 4-month high level in May. Further, the Nationwide house price index rose more-than-anticipated on a monthly basis in June. European markets ended the week on a negative footing. Data indicated that Eurozone’s business climate indicator eased more-than-anticipated in June. Additionally, the consumer confidence index fell in line with market expectations in June. Moreover, the economic confidence index declined to a 10-month low level in the same month. Meanwhile, the region’s flash consumer price index (CPI) advanced at par with market forecast on an annual basis in June. Separately, Germany’s unemployment rate remained steady in June, marking its lowest level since German reunification in 1990. Additionally, retail sales unexpectedly fell on a yearly basis in May. Moreover, the CPI rose at a slower-than-expected pace on an annual basis in June. Further, the GfK consumer confidence index recorded an unchanged reading in July. US markets ended the week in red, led by losses in technology sector stocks and after the US GDP growth was revised down in the first three months of 2018. Further, the US Michigan consumer sentiment index dropped more-than-expected in June. Meanwhile, the nation’s Chicago PMI surprisingly climbed to a 6-month high level in June. Adddtionally, advance goods trade deficit unexpectedly narrowed in May. Further, durable goods orders recorded a less-than-expected fall for a second consecutive month in the same month. Moreover, monthly new home sales rebounded more than market forecast in May, recording its highest level since November 2017. Asian markets ended lower last week.

Currency Update

The EUR ended firmer against the USD, after the European Union leaders clinched a deal on migration policy. The British Pound ended weaker against the greenback, amid continuing tensions over Brexit. The US Dollar ended mostly higher against its major counterparts last week, as trade war concerns subsided, following the announcement that the US President, Donald Trump’s administration would take a softer stance towards Chinese investment.

The Bank of England (BoE), in its Financial Stability Report (FSR), cautioned over the risks posed by Brexit to the UK financial system. Meanwhile, the BoE Governor, Mark Carney, warned that rising protectionism could hurt global growth. Further, he stated that the British government had committed to a temporary permissions regime from March 2019 onwards, however, the EU has not done enough to ensure financial stability in case of hard Brexit scenario.

The Week Ahead

Going ahead this week, investors will keep a tab on the FOMC meeting minutes, the US initial jobless claims, employment data, Markit services PMI, unemployment rate, and change in non-farm payrolls along with UK’s Markit manufacturing, services and construction PMI for further cues. Additionally, the Markit manufacturing and services PMI across the Eurozone along with Eurozone’s producer price index and unemployment rate will attract significant investor attention.